In early March 2024, Deputy Attorney General Lisa Monaco spoke at the American Bar Association’s 39th National White Collar Crime Institute. keynote speech Previewed developments in new and important Department of Justice (DOJ or Department of Justice) policy initiatives. Her speech reiterated many of the Department of Justice’s key themes throughout the current administration.
- personal responsibility,
- the importance of a strong corporate compliance program;
- encourage voluntary self-disclosure of wrongdoing;
- Adapt to keep up with disruptive technologies such as artificial intelligence.
DAG Monaco’s comments indicate that the Ministry will continue to focus on developing policies and guidance that advance objectives related to corporate enforcement in 2024.
Whistleblower Reward Program
The most notable update from DAG Monaco’s speech was that the DOJ has developed a new whistleblower incentive and reward program. DAG Monaco observes that whistleblower programs utilized by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and others have successfully extracted billions of dollars from corporate bad actors. Did. However, these programs only cover fraud within the agency’s limited jurisdiction. In addition, Quitam False Claims Act actions apply only to fraud against the government. Although these whistleblowing mechanisms have proven essential, DAG Monaco likened them to a “patchwork quilt” that fails to address the full range of corporate and financial misconduct that the Department of Justice prosecutes.
Accordingly, the Department of Justice will design and implement a whistleblower reward program administered by the Department. Under the new program, if an individual cooperates with the Department of Justice in discovering significant corporate or financial misconduct that the Department is not yet aware of, that individual will be eligible to receive a portion of the resulting forfeiture. there is a possibility.
While the Ministry of Justice is expected to announce specific details about this initiative in the coming months, DAG Monaco highlighted some guiding principles of the new program.
- Payments will only be provided to whistleblowers after all victims have been properly compensated.
- Payments will only be provided to those who submit truthful information not already known to the government.
- Whistleblowers involved in reported criminal activity cannot receive an award.and
- Payments will only be provided in the absence of existing financial disclosure incentives. Quitam Action and other federal whistleblower programs.
after that speech, Acting Assistant Attorney General (AAAG) Nicole M. Argentieri provided additional background on the program. He emphasized that the goal is to fill a gap, reiterating the Department’s intention to only award awards in areas where there is no longer a financial incentive for disclosure. AAAG Argentieri said he expects the Justice Department to establish monetary thresholds for the program, similar to the SEC and CFTC whistleblower programs, which limit rewards to cases that result in sanctions of $1 million or more. It pointed out. He did not specify the anticipated threshold, but said the Justice Department looked forward to receiving comments on the matter.
Although the Department of Justice intends to accept information regarding violations of any federal law, DAG Monaco notes that criminal abuses of the U.S. financial system, foreign corruption cases outside the SEC’s jurisdiction, and domestic corruption cases are of particular interest to the Department. reported that he had it.
Relationship with the Department of Justice’s Voluntary Self-Disclosure Initiative
The Whistleblower Rewards Program also aims to strengthen the Department of Justice’s 2023 policy commitment to encourage voluntary self-disclosure of wrongdoing. Although the Department of Justice’s recent policy seeks to provide tangible benefits to companies that voluntarily self-disclose, many companies may believe that the risks of self-reporting outweigh the potential benefits. .
But whistleblower reward programs add another layer of risk for companies to consider, each risk aimed at making voluntary self-disclosure a more attractive option. First, financial rewards for whistleblowers increase the likelihood that the government will notice wrongdoing. Additionally, whistleblower reward programs may influence whether companies should mobilize for self-disclosure earlier than whistleblowing if they want to preserve the benefits associated with whistleblowing. DAG Monaco said the competing incentives offered by the Ministry of Justice – a bounty for whistleblowers and a revocation for companies – are aimed at “creating synergies” and will encourage both companies. and Individuals should tell the Justice Department “as soon as they know what they know.” In other words, companies may now have to compete with their own employees to be first in the Justice Department’s door.
While companies potentially vulnerable to False Claims Act liability are likely to have conducted a risk assessment in the past, whistleblower bounty programs may be effective against potential violations of other statutes that yield significant settlement amounts. This is expected to have a significant impact on the consideration of self-disclosure regarding sexuality. Corrupt Practices Act.
A key aspect of this effort will be whether whistleblower reward programs require employees to disclose potential wrongdoing within the company before reporting it to the government. In its remarks, DAG Monaco reiterated the importance of investing appropriately in companies’ compliance programs. However, if a whistleblower is encouraged to disclose wrongdoing to the Department of Justice; in front When a company’s compliance department becomes aware of such misconduct, the company’s own ability to make the right choices can be compromised. Reward-focused systems can also create perverse incentives where employees are motivated by financial gain rather than truly promoting a culture of compliance.
next step
DAG Monaco said a “90-day sprint” would be undertaken to pilot the development and implementation of a whistleblower reward program run by the Ministry of Justice. AAAG Argentieri further added that the Department of Justice’s Money Laundering and Asset Recovery Division will play a lead role in the design of the pilot program, and that the U.S. Attorney, Federal Bureau of Investigation, and other members of the Department of Justice will play a leading role in designing the pilot program. He explained that he would work closely with the agency.
DAG Monaco also indicated that further guidance may be developed regarding voluntary self-disclosure. He said at least two U.S. attorney’s offices are piloting initiatives that are “essentially voluntary self-disclosure programs for individuals.” These efforts provide incentives, such as non-prosecution agreements, to perpetrators who disclose their wrongdoing and cooperate with more culpable targets. DAG Monaco confirms that the Ministry will evaluate the results of these pilot programs and[e] What will happen later this year? ”
The specific standards adopted by the Department of Justice in the coming months will prove important. But one thing is already clear. That means the Department of Justice is focused on encouraging people with knowledge of corporate wrongdoing to come forward and report what they know as soon as possible.
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